While it’s a given that launching a startup means embarking on a
long and winding road, pinning down the exact odds for success is
not the most crucial task for a company founder. The most
important question to ask is why so many fail. While the
overall economy can be a formidable influence, startups
frequently make certain common mistakes.

So to help all the future entrepreneurs out there, here are some
valuable lessons to learn from various failed startups,
including my own:

1. Validate the product idea with
customers. Entrepreneurs frequently fail
to validate the idea of startup's product with
customers. That was my big mistake as I launched my first
startup, Just A Five. Nobody wanted what my company had to offer.
I ended up wasting hundreds of thousands of dollars on building
something that nobody wanted.

Another entrepreneur who fell into that trap is Gary
Swartz, who founded Intellibank, a company he described in a
LinkedIn column as "sort of
like Dropbox done wrong." Swartz was convinced by
his investors that his product was good enough to move
forward, but he never stopped to check for warning signs from
his customers.

"The most important people any company should seek validation
from are ... customers," Swartz wrote. "That’s right, your
customers matter more than your investors -- and any good
investor would agree."

2. Understand the importance of co-founders, partners and
team members. Every great entrepreneur understands
that he or she can’t do everything. Certain tasks lie beyond
a founder's capabilities. So it's vital to have the
right partners and team members involved.

I learned this lesson the hard way when I started my second
company, Pixloo.com, and co-founded it
with a brilliant aspiring developer. He worked long and
hard hours. Everything was golden for 10 months. We launched
the product and acquired more than 80,000 customers in
less than a month.

Then came the disagreements. We disagreed over the direction of
the company and whether we should raise investment funds. He was
not willing to budge from his position. I knew we were not taking
the the right direction but since he owned half of the company,
there was nothing I could do. We ended up selling the company for
pennies.

3. Be aggressive. Most everyone would
probably admit a lack of fondness for pushy
salespeople. But those who want their business to
succeed will have to be extremely aggressive. They'll
have to simply pick up the phone and dial customers.

With my first startup, I had two scenarios to choose from:
not making money or calling potential clients and refusing
to take no for an answer. Without a major push, most
new businesses will fail. It's rare for a launch to pan out
without aggressive selling of the product.

4. Recognize that fundraising is
time-consuming. While many founders
of startups have their attention focused on helping
customers solve a problem, money is still needed to make this
all happen. Startups can’t operate or grow without revenue.
Building a startup entails numerous expenses. And sometimes it's
not possible to wait that long. Many business owners run out
of money.

Expect the fundraising process to eat up a lot of time.
It’s not like what's shown in the movies. Expect to pitch a
hundred venture capitalists before receiving real
investment. I’ve worked with countless startup founders who have
approached more than 50 investors and not received one bite.
How many VCs is it humanly possible pitch in a week? It all takes
time.

5. Keep your eyes on the financials. When I
started my second company, Pixloo.com, I thought it would
be possible to line up a million customers who would fork
out $10 a month. I was wrong. I signed up only about 90
customers who were willing to pay me $10 monthly. The
other 80,000 clients were nonpaying ones.

6. Sustain a long-term vision. Most
entrepreneurs realize they need a long-term goal for their
startup to succeed.

Take Meetro, for example, one of the first location-based social
networks. The startup did a great job of building an
initial fan base in Chicago and then tackled Silicon
Valley, according to a guest post by Meetro
founder Paul Bragiel on TechCrunch. Instead of
continuing to tend the Windy City community, the founders left
that area for San Francisco. "We weren’t there anymore to be
the face of the community, organize events,"
Bragiel wrote. "While the service continued and had a
core bunch of people using it, by no means was it as rabid as
it was at its peak."

To succeed, the entrepreneurs probably should have kept
in mind a long-term goal (like trying nuture several
local communities) and strived to establish one
community fully and sustain it before or while
initiating a presence in another location.

7. Don't raise much money. It might sound
odd but raising too much money might factor into
the sinking of a startup. That’s what
Ben Yoskovitz described was problematic
for his failed startup Standout Jobs: He raised about
$1.8 million too early. “We didn’t have the validation
needed to justify raising the money we did," he wrote, noting
that members of the founding team couldn’t build an minimal
viable product on their own. "That was a mistake.”

The danger for entrepreneurs who successfully raise lots of
money on a new product not fully tested is that they can
fall into the trap of thinking they have something people
are interested in. Instead of validating their assumptions, their
startups just get bigger and badder -- and not the cool kind of
bad.

8. Build a unique
product. An interesting dynamic is at play the
world of entrepreneurship. Founders can’t focus on too small of a
niche audience to avoid competition. It’s just
not possible to earn money that way. But be wary
of copying another startup.

As Cap Watkin, a designer now at Etsy, explained
in a post mortem about Formspring based
on his experience there, the staff spent a lot of time
and money investing in a share button that was similar to the
Facebook share and Twitter's “tweet this” buttons. "We
literally spent months on that system. We had to make sure our
servers could handle a potentially huge influx of
traffic, ... had to design and implement the feature,
make sure the implementation was easy for publishers, make
deals with publishers."

But the feature was a flop, he said.

“Entrepreneurs: build your product, not someone else’s," Watkin
advised. "The most successful products execute on a vision that
aligns with their product’s and users’ goal.”

9. Remember to continue to build the
business. A startup could be framed
around the greatest product in the world, but if the
company doesn’t grow, the business isn't going to last
very long. In other words, market the startup and spread the
word.

That’s was the problem for photography startup Everpix,
according to the Verge : "The founders acknowledge they
made mistakes along the way. They spent too much time on the
product and not enough time on growth and distribution."

10. Find the right investors. It's obvious that
an entrepreneurneeds to investors to
create a successful startup -- unless he or she is
independently wealthy. But find the right ones. It's
great to work with investors who share the same goals and
philosophy and also can provide overall support as well
as advice on how the company can become better
organized and do marketing.

But what happens if the investors don’t click with the
entrepreneur personally, professionally or understand the
business?
Consider David Levy's experience with his failed
startup Tigerbow. "We raised a (comparatively) small amount
of money from friends and family. ... Aside from the fact
that we got little (non-monetary) value added from these
investors, people who are unfamiliar with investing in startups
and the risks and challenges of building a company will drive you
bananas."